Banking News

The prospect of record low savings rates continuing is forcing many savers to review how they allocate their capital in an attempt to achieve the level of returns they have previously enjoyed. Investing in the stock market inevitably involves putting your capital at risk however there is a middle ground which continues to attract increasing interest – the structured deposit. With this in mind, we take a deeper look at this savings alternative to help understand why more and more savers are starting to see their appeal. more

With the current economic environment asking savers far more questions than it gives answers, it is good to know that there are alternatives available. We take a look at one such alternative that is proving particularly popular as savers face the harsh reality that the more traditional fixed rate savings products are failing to meet their needs. more

Millions of savers are facing the harsh realisty that there is little hope of change to interest and savings rates in the coming years. However, those with Cash ISAs do have one further option to consider – the ISA transfer. We take a closer look at why this is becoming a rising trend as well as what this could mean for those looking for the potential to improve the returns from their capital. more

With so many savers joining income investors in the hunt for high yields, being able to quickly understand and compare the numerous options available has become even more important. We therefore compare two of our most popular income investments to help understand what is driving their popularity and why they might meet your income needs. more

HBOS losses are not significant says Lloyds TSB

18 December 2008 / by Rebecca Sargent

The losses announced by HBOS last week in its trading update have sparked fears over the future of Lloyds TSB as it is poised to take-over the bank, debts and all.

The HBOS statement, which came ahead of its proposed placing and open offer which will allow its shareholders to invest in the new banking group, announced write-downs of £8billion.

As it stands, Lloyds TSB will raise £5.5billion through the Government's recapitalisation scheme, and HBOS will seek £11.5billion. However, following the latest HBOS update, experts are suggesting that Lloyds TSB may have to raise further capital when the two merge to become Lloyds Banking Group.

The speculation follows the news that Bank of England chief Mervyn King believes more capital is required to prop up the UK's banks and stimulate lending.

Commenting on the trading update at the time, Lloyds TSB said: "Whilst the fair value adjustments can only be finalised after the completion of the acquisition and in accordance with market conditions at the time, the additional impairment losses being incurred by HBOS are not currently expected to have a significant impact upon the size of the net negative capital adjustments the Group is likely to make upon acquisition."

Further enforcing this view, Lloyds TSB chairman Sir Victor Blank, talking to the BBC yesterday about the prospects of Lloyds Banking Group, said of further recapitalisation, "As we see it at the minute that is not something we expect to happen.

"I think there will be some adjustment in the way we can use our capital and I think that will enable us to lend more. We've got a fairly sophisticated idea as to what kind of impairments we're going to see in HBOS in the course of the next 12 months," he added.

If everything goes to plan, the merger between HBOS and Lloyds, which will create a 'superbank' with a 28 per cent share of the mortgage market, will take place by the end of January 2009.